Premier Vyapaar Pvt. Ltd., Kolkata V. ITO, Ward - 15(2), Kolkata, Kolkata

ITA 1010/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4030 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI CIT LD
• Assessee Lawyers: D S DAMLE; AKKAL DUDHEWEWALA FCA LD ARS
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion; Borrowed satisfaction
• Section: 143(3); 142(1); 147; 148; 144; 10

Judgement Text

1 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] ITA NO.1953/KOL/2017 ASSESSMENT YEAR: 2007-08 ITA NO.1010/KOL/2018 ASSESSMENT YEAR: 2007-08 M/S. PREMIER VYAPAAR PVT. LTD PAN: AADCP 8876D VS. INCOME TAX OFFICER, WARD 15(2), KOLKATA APPELLANT/ASSESSEE RESPONDENT/DEPARTMENT DATE OF HEARING 26.09.2018 DATE OF PRONOUNCEMENT 02.11.2018 FOR THE APPELLANT SHRI D.S. DAMLE, FCA & SHRI AKKAL DUDHEWEWALA, FCA, LD.ARS FOR THE RESPONDENT SHRI P. K SRIHARI, CIT, LD.DR ORDER PER SHRI A.T. VARKEY, JM THESE APPEALS ARE PREFERRED BY THE ASSESSE E AGAINST THE SEPARATE ORDERS OF LD. CIT (APPEALS) , 5, KOLKATA DATED 05-07-2017/26-03-2018 FOR THE ASSESSMENT YEAR 2007-08. ITA NO. 1953/KOL/2017 A.Y 2007-08 (BY THE ASSESSE) 2. THE MAIN GROUND EMPHASIZED BY THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IS ERRONEOUSLY DECIDED THE LEGAL ISSUE RAISED BY THE A SSESSE THAT INITIATION OF RE-ASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT WAS BAD IN LAW. 3. BRIEF FACTS OF THE CASE ARE THAT THIS A.Y IS THE FIRST YEAR OF OPERATION OF THE APPELLANT COMPANY. THE APPELLANT ASSESSE WAS ENGAGED IN TRADI NG OF SAREES AND ALSO TRADING OF COMMISSION ON SALE OF SAREES. DURING THE A.Y UNDER CONSIDERATION, THE APPELLANT COMPANY ACHIEVED TURNOVER OF RS.6,72,000/- AND FROM THE SA LE OF SAREES EARNED COMMISSION OF RS.13,750/- AND ALSO INCURRED LOSS OF RS.951.72 DUR ING THIS YEAR. THE ASSESSE HAD FILED ITS IT RETURN ON 24-10-2007 ELECTRONICALLY DETERMINING TOT AL INCOME AT RS. NIL. LATER ON, THE 2 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD ASSESSMENT WAS PICKED UP FOR SCRUTINY AND THEREAFTE R WAS COMPLETED U/S. 143(3) OF THE ACT ON 29-09-2009 DETERMINING THE TOTAL INCOME AT RS. 1 ,200/-. SUBSEQUENTLY, ON RECEIPT OF AN INFORMATION FROM THE OFFICE OF THE CIT-15, KOLKATA THAT THE APPELLANT/ASSESSEE COMPANY HAS RECEIVED ACCOMMODATION ENTRIES TO THE EXTENT OF RS. 27,50,000/- FROM ONE PARTY, SHRI MADAN MOHAN CHOWDHURY, WHO WAS ALLEGED TO BE AN ENTRY PR OVIDER, THEN AO, WARD 1(4), KOLKATA INITIATED PROCEEDINGS U/S. 147 OF THE ACT ON 21-02- 2014 AND ISSUED NOTICE U/S. 148 ON 21-03- 2014 TO THE APPELLANT COMPANY. LATER THE FILE RELA TING TO THE APPELLANT ASSESSEE WAS TRANSFERRED TO THE PRESENT AO, WARD 15(2), KOLKATA (ACCORDING TO ASSESSEE THE CHANGE OF JURISDICTION WAS NOT INTIMATED TO IT) AND THEREAFTE R THE AO ISSUED NOTICE U/S. 143(2) ON 6-2- 2015 REQUIRING THE ASSESSEE COMPANY TO SUBMIT VARIO US DOCUMENTS AND THEN THE AO FRAMED THE RE-ASSESSMENT DT. 13-03-2015 WHICH WAS PASSED U /S. 144 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE LD. CIT(A), WHICH WAS DISMISSED. AGAINST THE ACTION OF LD CIT(A), THE AP PELLANT ASSESSEE HAS PREFERRED THIS APPEAL BEFORE US. 5. AT THE OUTSET THE LD. AR OF THE ASSESSEE DREW OU R ATTENTION TO GROUND NO. 7 WHICH WE NOTE IS THE LEGAL ISSUE ASSAILING THE ASSUMPTION OF JURISDICTION BY AO TO REOPEN THE ORIGINAL ASSESSMENT COMPLETED U/S. 143(3) AFTER 4 Y EARS FROM THE RELEVANT AY. SINCE THIS ISSUE GOES TO THE ROOT OF THE APPEAL, THE LD. AR UR GED BEFORE US TO DECIDE THIS ISSUE FIRST. THIS PLEA OF LD. AR HAS BEEN STOUTLY OPPOSED BY LD. DR WHO DREW OUR ATTENTION TO THE FACT THAT THIS ISSUE WAS NEVER RAISED AS A SPECIFIC GROU ND BEFORE THE LD. CIT(A) AND, THEREFORE, ACCORDING TO HIM, IT SHOULD NOT BE ENTERTAINED WHIL E DECIDING THIS APPEAL. HOWEVER, WE CANNOT ACCEPT THE LD. DRS CONTENTION, FOR TWO REAS ONS, ONE IS THAT ASSESSEE HAD INFACT RAISED THIS ISSUE AND FOR THAT LD AR DREW OUR ATTENTION TO THE WRITTEN SUBMISSION BEFORE LD CIT(A) PLACED AT PAGE 25 TO 30 OF PAPER BOOK AND MOREOVER, WE NOTE THAT GROUND NO. 7 RAISED BY THE ASSESSEE IS AGAINST THE LEGAL VALIDITY OF ASSUM PTION OF JURISDICTION BY AO TO REOPEN ORIGINAL ASSESSMENT FRAMED U/S. 143(3) THAT TOO AFT ER 4 YEARS FROM THE RELEVANT ASSESSMENT YEAR, WHICH IS PURELY A LEGAL ISSUE WHICH GOES TO T HE ROOT OF THE APPEAL ITSELF AND CAN BE RAISED EVEN FOR THE FIRST TIME BEFORE THIS TRIBUNAL AS HELD BY HONBLE SUPREME COURT IN NTPC VS.CIT 229 ITR 383 (SC). THEREFORE, WE ARE IN CLINED TO ADJUDICATE THIS LEGAL ISSUE FIRST. IN ORDER TO ADJUDICATE THE LEGAL ISSUE RAISE D BEFORE US, WE NEED TO UNDERSTAND THE SCHEME OF THE ASSESSMENT OF INCOME. THE CONCEPT OF THE ASSESSMENT IS GOVERNED BY THE TIME BARRING RULE AND ASSESSEE ACQUIRES A RIGHT AS TO TH E FINALITY OF THE PROCEEDINGS. QUIETUS OF THE COMPLETED ASSESSMENT CAN BE DISTURBED ONLY WHEN THE RE IS INFORMATION OR EVIDENCE REGARDING UNDISCLOSED INCOME OR AO HAD INFORMATION IN HIS POS SESSION SHOWING ESCAPEMENT OF 3 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD INCOME. FOR THAT THE PARLIAMENT IN ITS WISDOM HAS E MPOWERED THE AO TO RE-OPEN THE ASSESSMENT OF EARLIER YEARS IN ACCORDANCE WITH SECT ION 147 R.W.S 148 OF THE ACT. THE CONDITION PRECEDENT FOR RE-OPENING OF ASSESSMENT IS THAT THE AO SHOULD HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT . REASON TO BELIEVE POSTULATES FOUNDATION BASED ON INFORMATION AND BELIEF BASED ON REASON EVE N AFTER FOUNDATION BASED ON INFORMATION IS THERE, STILL THERE MUST BE REASON TO WARRANT HOL DING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE HONBLE SUPREME COURT IN THE CASE OF M/S. GANGA SARAN & SONS PVT. LTD VS. ITO REPORTED IN 131 ITR 1 (SC) HE LD THAT EXPRESSION REASON TO BELIEVE OCCURRING IN SECTION 147 IS STRONGER THAN THE EXPRE SSION IS SATISFIED AND THIS LEGAL REQUIREMENT HAS TO BE MET IN THE REASONS RECORDED B EFORE RE-OPENING. HOWEVER, IT HAS TO BE KEPT IN MIND THAT IF AN ASSESSMENT (ORIGINAL ASSESS MENT) HAS BEEN MADE U/S. 143(3), THE PROVISO TO SEC. 147 MANDATES THAT NO ACTION SHALL B E TAKEN UNDER SECTION 147 AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR . THUS IN A CASE WHERE ASSESSMENT WAS MADE U/S. 143 (3) OF THE ACT AND ARE SOUGHT TO BE REOPENED AFTER THE EXPIRY OF 4 YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, IN ORDER TO ASSUME JURISDICTION U/S. 147 OF T HE ACT, ONE OF THE CONDITION PRECEDENTS IS THAT RECORDED REASONS SHOULD POINT OUT THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR ASSE SSMENT. SO, ONCE THE AO COMES TO A FINDING OF FACT THAT THERE WAS A FAILURE OR THERE WAS AN IM PROPER DISCLOSURE ON THE PART OF THE ASSESSEE, HE HAS TO RECORD THE SAME BY INCORPORATIN G IT IN THE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THEN ONLY THE AO CAN ASSUME JURISDICTION OR ELSE HE CANNOT. SO WHILE DETERMINING THE VALIDITY OF THE ACTION OF AO WHEN HE INTENDS TO RE-OPEN A SCRUTINIZED ASSESSMENT AFTER THE EXPIRY OF 4 YEAR S FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS CONCERNED, ONE HAS TO KEEP IN MIND THE AFOR ESAID CONDITION PRECEDENT WHICH IS THE JURISDICTIONAL FACT, NECESSARY FOR THE SUCCESSFUL U SURPATION OF JURISDICTION. FOR THAT WE NEED LOOK INTO THE REASONS RECORDED FOR RE-OPENING :- REASONS FOR BELIEF THAT INCOME HAS ESCAPED ASSESSME NT M/S PREMIER VYAPAAR PRIVATE LIMITED, PAN: AADCP8876 D, ASSESSMENT YEAR: 2007-08, IN THIS CASE THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR: 2007-08, ON 24/10/200 SHOWING TOTAL INCOME AT 'NIL'. THE RETURN WAS PROCESSED U/S143{L) OF THE I.T. ACT'1961 VIDE ORDER DATE 30/0 1/2009. THEREAFTER THE ASSESSMENT WAS COMPLETED U/S143{3} O F THE LT. ACT'1961 VIDE ORDER DATED 29.09.2009 AT ASSESSED TOTAL INCOME OF RS.L,200/-. 4 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD SUBSEQUENTLY INFORMATION WAS RECEIVED FROM THE OFFI CE OF LD. CIT, KOL.-15, KOLKATA, VIDE LETTER DATED 10.04.2013 THAT THIS AS SESSEE COMPANY HAS RECEIVED ACCOMMODATION ENTRIES, TO THE EXTENT OF RS.27,50,00 0/-, FROM ONE PARTY NAMELY SRI MADAN MOHAN CHOWDHURY, DURING THE YEAR ENDED, ON 31 .03.2097, WHO IS ALLEGED TO BE AN ENTRY PROVIDER. IT IS STATED THAT SRI MADAN MOHA N CHOWDHURY, HAD GIVEN AFORESAID ACCOMMODATION ENTRIES TO THIS ASSESSEE COMPANY, THR OUGH CHEQUE AFTER MAKING CASH DEPOSITS IN HIS BANK ACCOUNT. THE GENUINENESS, CRED ITWORTHINESS OF THE AFORESAID ACCOMMODATION ENTRIES, RECEIVED BY THE ASSESSEE HAS NOT BEEN SUBSTANTIATED AND HAS NOT BEEN EXAMINED. FOR THE REASONS STATED ABOVE THERE IS REASON TO BEL IEVE THAT INCOME OF THE ASSESSEE COMPANY FOR THE YEAR ENDED ON 31.03.2008 I N EXCESS OF RS.1,00,000/- HAS ESCAPED ASSESSMENT. 6. WE NOTE THAT THE ORIGINAL ASSESSMENT U/S. 143(3) WAS PASSED ON 29-09-09 AND THE NOTICE PROPOSING THE AOS DESIRE TO REOPEN WAS ISSU ED ON 21-03-2014, WHICH IS ADMITTEDLY AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A.Y. UNDER CONSIDERATION. IN SUCH A SCENARIO ONE OF THE ADDITIONAL CONDITION PRECEDENT WHICH ALSO IS REQUIRED TO BE SATISFIED IS THAT THE REASONS RECORDED SHOULD POINT OUT WHAT WAS THE MATERIAL FACTS THE ASSESSEE FAILED TO DISCLOSE FULLY & TRULY NECESSARY FOR ASSESSMENT. A BARE PERUSAL OF THE REASONS RECORDED WHICH IS SET OUT ABOVE DOES NOT REVEAL ANY STATEMEN T TO THE EFFECT WHICH WOULD THROW LIGHT AS TO WHAT WAS FOUND BY THE AO WHICH CAN BE CONSTRUED TO BE A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY & TRULY THE MATERIAL FAC TS NECESSARY FOR THE ASSESSMENT DURING ORIGINAL ASSESSMENT, WHICH RECORDING OF WHICH WAS SINE QUA NON AND HAD TO BE SPELT OUT BY THE AO IN THE REASONS RECORDED TO VALIDLY ASSUME JU RISDICTION U/S. 147 OF THE ACT. IN THIS CASE, FROM A PLAIN READING OF REASONS RECORDED, WE NOTE THAT THE AO HAS NOT SATISFIED THIS JURISDICTIONAL FACT. THUS, USURPATION OF JURISDICTI ON U/S. 147 TO RE-OPEN THE ASSESSMENT COMPLETED U/S. 147, AFTER FOUR YEARS HAS TO BE STRU CK DOWN FOR NOT SATISFYING THE JURISDICTIONAL FACT WHICH IS A CONDITION PRECEDENT TO LEGALLY ASSU ME JURISDICTION TO REOPEN ASSESSMENT AFTER 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEA R. THE JUDICIAL PRINCIPLE AS SET OUT IN THE FOREGOING FINDS SUPPORT IN THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF CALCUTTA DISCOUNT CO LTD (41 ITR 191) WHEREIN THE A PEX COURT HAD HELD AS FOLLOWS: 'BOTH THE CONDITIONS, (I) THE INCOME-TAX OFFICER HA VING REASON TO BELIEVE THAT THERE HAS BEEN UNDER-ASSESSMENT AND (II) HIS HAVING REASON TO BELIEVE THAT SUCH UNDER- ASSESSMENT HAS RESULTED FROM NONDISCLOSURE OF MATER IAL FACTS, MUST CO-EXIST BEFORE THE INCOME-TAX OFFICER HAS JURISDICTION TO START PROCEE DINGS AFTER THE EXPIRY OF FOUR YEARS.' 5 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD 7. USEFUL REFERENCE CAN ALSO BE MADE TO THE JUDGMEN T OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD. VS. ACIT (SUPRA). THE RELEVANT OBSERVATIONS OF THE HONBLE COURT WERE AS FOLLOWS: 19. IN THE CASE IN HAND IT IS NOT IN DISPUTE THAT THE ASSESSMENT YEAR INVOLVED IS 1996- 97. THE LAST DATE OF THE SAID ASSESSMENT YEAR WAS 3 1ST MARCH, 1997 AND FROM THAT DATE IF FOUR YEARS ARE COUNTED, THE PERIOD OF FOUR YEARS EX PIRED ON 1ST MARCH, 2001. THE NOTICE ISSUED IS DATED 5TH NOVEMBER, 2002 AND RECEIVED BY THE ASSESSEE ON 7TH NOVEMBER, 2002. UNDER THESE CIRCUMSTANCES, THE NOTICE IS CLEA RLY BEYOND THE PERIOD OF FOUR YEARS. 20. THE REASONS RECORDED BY THE ASSESSING OFFICER N OWHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSMENT YEAR. IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE AS SESSING OFFICER. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE T O THOSE REASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REA CH TO THE CONCLUSION AS TO WHETHER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED ASSE SSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT H IS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNAMBIGUOU S AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS M IND. REASONS ARE THE MANIFESTATION OF MIND OF THE ASSESSING OFFICER. THE REASONS RECOR DED SHOULD BE SELF-EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASO NS. REASONS PROVIDE LINK BETWEEN CONCLUSION AND EVIDENCE. THE REASONS RECORDED MUST BE BASED ON EVIDENCE. THE ASSESSING OFFICER, IN THE EVENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY THE ASS ESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABL ISH VITAL LINK BETWEEN THE REASONS AND EVIDENCE. THAT VITAL LINK IS THE SAFEGUARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS RECORDED BY THE ASSESSING O FFICER CANNOT BE SUPPLEMENTED BY FILING AFFIDAVIT OR MAKING ORAL SUBMISSION, OTHERWI SE, THE REASONS WHICH WERE LACKING IN THE MATERIAL PARTICULARS WOULD GET SUPPLEMENTED, BY THE TIME THE MATTER REACHES TO THE COURT, ON THE STRENGTH OF AFFIDAVIT OR ORAL SUBMISS IONS ADVANCED. 21. HAVING RECORDED OUR FINDING THAT THE IMPUGNED N OTICE ITSELF IS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 1996 -97 AND DOES NOT COMPLY WITH THE REQUIREMENTS OF PROVISO TO SECTION 147 OF THE ACT, THE ASSESSING OFFICER HAD NO JURISDICTION TO REOPEN THE ASSESSMENT PROCEEDINGS W HICH WERE CONCLUDED ON THE BASIS OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. ON THIS SHORT COUNT ALONE THE IMPUGNED NOTICE IS LIABLE TO BE QUASHED AND SET ASIDE. 6 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD 8. THIS JUDGMENT OF THE HONBLE BOMBAY HIGH COURT WAS FOLLOWED WITH APPROVAL BY THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN T HE CASE OF AMIYA SALES & INDUSTRIES LTD VS CIT (SUPRA). IN THE SAID JUDGEMENT, THE HONBLE HIGH COURT HELD AS UNDER: IN A CASE WHERE ASSESSMENT IS MADE UNDER SECTION 1 43(3) AND IS SOUGHT TO BE REOPENED AFTER THE EXPIRY OF FOUR YEARS FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR, IN ORDER TO ASSUME JURISDICTION UNDER SECTION 147, ONE OF THE CONDITIONS PRECEDENT IS THAT THE RECORDED REASONS SHOULD POINT OUT THE FAILURE O N THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY THE MATERIAL FACTS NECESSA RY FOR ASSESSMENT. ONCE THE ASSESSING OFFICER COMES TO A FINDING THAT THERE WAS FAILURE OR THERE WAS NO IMPROPER DISCLOSURE ON THE PART OF THE ASSESSEE, HE FORMS TH E BELIEF WHICH IS RECORDED AND ASSUMES JURISDICTION UNDER SECTION 147. IN THE INSTANT CASE, THE ASSESSMENTS FOR BOTH THE A SSESSMENT YEARS WERE MADE UNDER SECTION 143(3). THERE WAS NO DISPUTE THAT THE NOTIC ES UNDER SECTION 147 WERE ISSUED BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSE SSMENT YEARS. THUS, IN ORDER TO INITIATE ACTION UNDER SECTION 147 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEARS, THERE SHOULD HAVE BEEN EITHER FAI LURE OR NON-DISCLOSURE ON THE PART OF THE ASSESSEE. FROM THE RECORDED REASONS IT WAS F OUND THAT THE ASSESSING OFFICER WAS SEEKING TO REOPEN THE ASSESSMENTS SINCE THERE WAS A N INCORRECT INTERPRETATION OF ACCOUNTS BY THE ASSESSING OFFICER AND FOR THAT TH E ASSESSEE GOT THE BENEFIT OF LOSS FOR THE ASSESSMENT YEAR 1992-93 WHICH WAS CARRIED FORWA RD TO THE SUBSEQUENT YEARS. IN THE INSTANT CASE, IT HAD NOWHERE BEEN RECORDED T HAT THERE WAS FAILURE OR IMPROPER DISCLOSURE ON THE PART OF THE ASSESSEE. HOWEVER, TH E ASSESSING OFFICER SOUGHT TO REOPEN THE ASSESSMENTS AS THERE WAS INCORRECT INTER PRETATION OF ACCOUNT BY THE ASSESSING OFFICER. THE RECORDED REASONS DID NOT SPE AK OF ANY OMISSION OR FAILURE ON THE PART OF THE ASSESSEE. THUS, ADMITTEDLY THERE WA S NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS IN THE ASSESSMENT. INCORRECT INTERPRETATION OF ACCOUNTS BY THE ASSESSING OFFICER COULD NOT CONFER JURISDICTION ON THE ASSESSING OFFICER TO ISSUE NOTICES UNDER SECTION 14 8 FOR REOPENING THE ASSESSMENTS AS SOUGHT TO BE MADE IN THE INSTANT CASE. IF THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSURE FULLY AND TRULY THE MATERIAL FACTS, WRONG INTERPRETATION OF ACCOUNTS BY THE ASSESSING OFFICER LEADING TO EXCESSIVE RELIEF CANNOT BE A GROUND FOR REOPENING A ND THUS CANNOT CONFER JURISDICTION ON THE ASSESSING OFFICER. EXPLANATION 2 CANNOT BE READ IN ISOLATION OF SECTION 147. IT SHOULD BE READ IN CONJUNCTION WITH THE PROVISIONS I N THE SECTION. THE WORDS FOR THE PURPOSE OF THIS SECTION APPEARING IN EXPLANATION 2 SHOW THAT THE CONDITIONS PRECEDENT FOR REOPENING ASSESSMENT AS LAID DOWN IN SECTION 14 7 HAVE TO BE COMPLIED WITH. IN INSTANT CASE, SINCE THE CONDITIONS FOR ASSUMING OF JURISDICTION UNDER SECTION 147 WERE NOT FULFILLED, THE NOTICES UNDER SECTION 148 W ERE UNCALLED FOR AND WARRANTED INTERFERENCE BY APPEARING ORDERS. IF AN AUTHORITY A SSUMES JURISDICTION ILLEGALLY WHICH IS NOT VESTED UNDER THE LAW IT WOULD BE FIT AND PRO PER FOR THE WRIT COURT TO INTERVENE. IN THE INSTANT CASE, AS THERE WAS NO OMISSION OR FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS IN THE RETURN, AS THE ASSESSING OFFICER SOUGHT 7 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD TO REOPEN THE ASSESSMENTS DUE TO WRONG INTERPRETATI ON OF ACCOUNTS BY THE ASSESSING OFFICER WHICH WAS NOT PERMISSIBLE UNDER SECTION 147 TO ASSUME JURISDICTION, THE ASSESSEE WAS JUSTIFIED IN INVOKING THE WRIT PETITIO N. THUS, THE INSTANT PETITION WAS TO BE ALLOWED AND, C ONSEQUENTLY IMPUGNED NOTICES UNDER SECTION 147/148 WERE TO BE QUASHED. 9. IN THE CASE OF ASSAM CO. LTD VS UNION OF INDIA (150 TAXMAN 571), THE HONBLE GAUHATI HIGH COURT HAS HELD AS UNDER: 43. AS NOTICED HEREINABOVE, EXCEPT IN W.P. (C) NO. 1163 AND W.P. (C) NO. 1258 OF 2003, THE IMPUGNED NOTICES HAD BEEN ISSUED BEFORE T HE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE ATTEMPT MA DE ON THE PART OF THE RESPONDENTS TO CONTEND THAT THE OMISSION ON THE PART OF THE ASS ESSEES TO MENTION IN THEIR RETURN THAT THE CESS ON GREEN TEA LEAVES WAS PAID UNDER THE 199 0 ACT AMOUNTS TO FAILURE TO MAKE FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS NECE SSARY FOR ASSESSMENTS HAS TO BE MENTIONED ONLY TO BE REJECTED. THERE IS NO DISPUTE THAT AT THE TIME OF ASSESSMENT, THE ASSESSEES WERE PERMITTED DEDUCTION ON THE ABOVE COU NT AND THE COMPOSITE INCOME UNDER RULE 8(1) WAS ACCORDINGLY COMPUTED. AT NO POI NT OF TIME WAS ANY RESERVATION EXPRESSED BY THE RESPONDENT AUTHORITIES AS TO THE N ATURE OF THE PAYMENT OR THE ENTITLEMENT OF THE ASSESSEES TO BE EXTENDED THE BEN EFIT OF DEDUCTION THEREOF ON THE BASIS OF THE DISCLOSURE MADE IN THE RETURNS. THE RESPONDE NT AUTHORITIES THUS HAVE TO BE FIRMLY HELD ONLY TO THE REASONS AND/ OR THE GROUNDS NARRATED IN THE IMPUGNED NOTICES. NOT ONLY IS THIS STAND ABSENT IN THE IMPUGNED NOTIC ES, THE SAME DO NOT INDICATE AS WELL AS TO WHAT MATERIAL FACTS HAD NOT BEEN FULLY AND TR ULY DISCLOSED BY THE ASSESSEES. 44. THE APEX COURT WHILE DWELLING ON THE SCOPE OF T HE REQUIREMENT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AS COMPREHENDED IN THE PROVISO TO SECTION 147 HELD IN PARASHURAM POTTERY WORKS CO. LTD. V. ITO [1977] 106 ITR 1 (SC), THAT THE DUTY OF THE ASSESSEE IN ANY CASE DOES NOT EXTEND BEYOND MAK ING A TRUE AND FULL DISCLOSURE OF PRIMARY FACTS AND IT IS NOT ITS RESPONSIBILITY TO A DVISE THE ASSESSING OFFICER WITH REGARD TO THE INFERENCE WHICH HE SHOULD DRAW THEREFROM. IF SUCH OFFICER DRAWS ANY INFERENCE WHICH APPEARS TO BE SUBSEQUENTLY ERRONEOUS, A MERE CHANGE OF OPINION WOULD NOT JUSTIFY INITIATION OF ACTION FOR REOPENING THE ASSE SSMENT, IT HELD. 45. THE SAME VIEW WAS EXPRESSED IN ASSOCIATED STONE INDUSTRIES (KOTAH) LTD. V. CIT [1997] 224 ITR 560 1 (SC). THE BOMBAY HIGH COURT ON THE SAME ISSUE IN H INDUSTAN LEVER LTD. V. R.B. WADKAR, ASSTT. CIT (NO. 1) [200 4] 268 ITR 332 2 , HELD THAT THE REASONS IN SUPPORT OF THE PROPOSED ACTION UNDER SEC TION 147 OF THE ACT MUST NECESSARILY REVEAL ALL FACTS OR MATERIALS THAT HAD NOT BEEN DISCLOSED BY THE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT SO AS TO E STABLISH THE LINK BETWEEN THE REASONS AND EVIDENCE. IT WAS FURTHER HELD THAT THE REASONS SO RECORDED CANNOT BE SUPPLEMENTED BY ANY AFFIDAVIT OR ORAL SUBMISSIONS AS OTHERWISE T HE REASONS WHICH WERE LACKING IN THE MATERIAL PARTICULARS WOULD RECEIVE SUPPLEMENTAT ION BY THE TIME THOSE ARE SUBJECTED TO COURTS SCRUTINY. 46. THE NOTICES ADMITTEDLY DO NOT EXHIBIT AS TO WHA T MATERIAL FACTS WERE NOT TRULY AND FULLY DISCLOSED BY THE ASSESSEES NECESSARY FOR ASSE SSMENT FOR THE ASSESSMENT YEARS IN 8 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD QUESTION. THE RETURNS ADMITTEDLY MENTION ABOUT THE CESS ON GREEN LEAVES PAID AND DEDUCTIONS AS PERMISSIBLE WERE ALLOWED. IN VIEW OF THE EXPOSITION OF LAW ON THE POINT MENTIONED HEREINABOVE, THE INESCAPABLE CONCLUSION I S THAT THE IMPUGNED NOTICES IN W.P. (C) NO. 1163 OF 2003 AND W.P. (C) NO. 1258 OF 2003 ARE ALSO NOT SUSTAINABLE BEING BARRED BY TIME. 10. KEEPING IN VIEW THE RATIO LAID DOWN IN THESE DE CISIONS AND APPLYING IT TO THE APPELLANT COMPANYS CASE, WE FIND THAT IN THE AUDIT ED ACCOUNTS FILED IN THE COURSE OF ORIGINAL ASSESSMENT, THE ASSESSEE HAD DISCLOSED ITS TRANSACT IONS WITH SHRI CHOWDHURY TOWARDS SALE OF SAREES ON COMMISSION TO THE EXTENT OF RS.27,50,000 /-. THE COMMISSION CHARGED @ 0.5% AMOUNTING TO RS.13,750/- WAS ALSO DISCLOSED AND THE SAME WAS ALSO DULY OFFERED TO TAX. IN VIEW OF THE FOREGOING WE NOTE THAT EVEN IN THE REAS ONS RECORDED, THE AO HAD NOT SPOKEN ANY FACTS WHICH WOULD THROW LIGHT THAT THE DISCLOSED FA CTS OF SAREE SALES ON COMMISSION COULD BE TAKEN AS FALSE OR UNTRUE OR FROM WHICH IT COULD BE INFERRED THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THE ASSESSEE. 11. THE JURISDICTIONAL FACT FOR ASSUMPTION OF JURIS DICTION AFTER FOUR YEARS AS STATED EARLIER IS THAT THE ASSESSEE HAD FAILED TO DISCLOSE TRULY & FULLY THE FACTS NECESSARY FOR ASSESSMENT. HENCE THE QUESTION WHICH ARISES IN THE FACTS OF THE PRESENT CASE IS, WHEN THE ASSESSEE HAD ADMITTEDLY DISCLOSED THE FACTS ABOUT THE COMMISSION INCOME DERIVED FROM SALE OF SAREES OF RS.27,50,000/- TO SHRI MADAN MOHAN CH OWDHURY, THEN DID THE AO BRING ON RECORD IN THE REASONS RECORDED AS TO WHETHER THE SA ID DISCLOSURE WAS NOT TRULY & FULLY MADE IN THE COURSE OF ORIGINAL ASSESSMENT. ON PERUSAL OF THE REASONS RECORDED BY THE AO, WE NOTE THAT THE AO HAS NOT POINTED OUT ANY FAILURE OR OMIS SION ON THE ASSESSEES PART TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AS SESSMENT. 12. MOREOVER THE LD. AR DREW OUR ATTENTION TO THE F ACT THAT EVEN IN THE PROCEEDINGS CONDUCTED U/S 147/143(3), THE AO NEVER QUESTIONED T HE ASSESSEE REGARDING ITS TRANSACTIONS WITH SHRI MADAN MOHAN CHOWDHURY. THE LD. AR ALSO DR EW OUR ATTENTION TO THE NOTICE ISSUED BY THE AO U/S 142(1) DATED 06.02.2015, WHICH IS AT PAGES 19 & 20 OF THE PAPER-BOOK. IN THE NOTICE ISSUED U/S 142(1), EVEN THOUGH THE AO HAD CALLED UPON THE ASSESSEE TO PROVIDE INFORMATION & DETAILS ON ELEVEN ISSUES, NOT A SINGL E REQUISITION WAS DIRECTED IN CONNECTION WITH THE ASSESSEES TRANSACTIONS WITH SHRI MADAN MO HAN CHOWDHURY. THESE FACTS THEREFORE SUPPLEMENT THE ASSESSEES CASE THAT THE AO WAS HIMS ELF NEVER SATISFIED THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AS A CONSE QUENCE OF ASSESSEES TRANSACTIONS WITH SHRI MADAN MOHAN CHOWDHURY WHO HAD ALLEGED PROVIDED BENEFIT IN THE FORM OF SUM PAID 9 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD AMOUNTING TO RS.27,50,000/- IN THE FORM OF SALE CON SIDERATION FOR SAREES. WE THEREFORE FIND THAT NO MATERIAL WAS AVAILABLE EITHER IN THE RECORD ED REASONS OR IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH IT CAN BE HELD THAT THERE WAS A FAIL URE ON THE PART OF THE ASSESSEE IN DISCLOSING FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AS SESSMENT PRIOR TO COMPLETION U/S 143(3). 13. WE NOTE THAT IN THE CASE OF HINDUSTAN LEVER LTD VS R.B. WADEKAR (SUPRA) AS ALSO IN AMIYA SALES & INDUSTRIES VS ITO (SUPRA), IT HAS BEE N EMPHASIZED BY THE HON'BLE COURTS THAT REASONS RECORDED BY THE AO PRIOR TO ISSUE OF NOTICE U/S 148, MUST CONTAIN SPECIFIC FINDING WITH REGARD TO THE ALLEGED FAILURE ON THE PART OF T HE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. IT HAS ALSO BEEN OBSERVED BY THE HO N'BLE HIGH COURTS THAT THE 'REASONS' RECORDED BY THE AO HAVE TO BE READ AS IT IS. THE AO HAS TO SPEAK THROUGH HIS 'REASONS' AND SHOULD DISCLOSE HIS MIND THROUGH 'REASONS' RECORDED BY HIM. THUS, IT IS FOR THE 'REASONS' AS RECORDED BY THE AO WHICH SHOULD PRIMA FACIE DISCLOS E ABOUT HIS SATISFACTION THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR PR IOR TO PASSING OF THE ORDER U/S 143(3). 14. AT THE COST OF REPETITION IN THE FACTS OF THE C ASE BEFORE US AND IN THE LIGHT OF LAW AS EXPLAINED IN AFORESAID JUDGMENTS, IT IS NOTED THAT NOTHING HAS BEEN RECORDED BY THE AO IN THE 'REASONS' ABOUT ANY FAILURE ON THE PART OF THE ASSE SSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE FRAMING OF ORIGINAL ASSESSM ENT. IT HAS NOWHERE BEEN MENTIONED BY THE AO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY THE ASSESSEE. THUS, VITAL LINK BETWEEN 'REASONS' AND AOS FINDINGS ABOUT ASSESSEES ALLEGE D FAILURE HAS NOT BEEN ESTABLISHED. THIS VITAL LINK IS THE SAFEGUARD AGAINST ARBITRARY REOPE NING OF THE CONCLUDED ASSESSMENT. THE 'REASONS' RECORDED CANNOT BE SUPPLEMENTED BY WAY OF FURTHER OBSERVATIONS IN THE ASSESSMENT ORDER OR IN ANY OTHER MANNER. THE VALIDITY OF THE R EOPENING CAN BE EXAMINED ONLY ON THE BASIS OF 'REASONS' AS RECORDED BY THE AO ALONE AND NOT IN SUPPLEMENTARY MATERIAL. FROM THE BARE PERUSAL OF REASONS AS THEY ARE IN THE FACTS OF THE PRESENT CASE, THERE IS NOTHING TO INDICATE THAT THERE WAS OMISSION ON THE ASSESSEES PART TO D ISCLOSE TRULY & FULLY ALL MATERIAL FACTS IN THE COURSE OF ORIGINAL ASSESSMENT. FURTHER EVEN IN THE COURSE OF PROCEEDINGS U/S 147/143(3), NO ENQUIRY OR REQUISITION WHATSOEVER WAS MADE BY TH E AO CALLING FOR INFORMATION IN CONNECTION WITH THE TRANSACTIONS WITH SHRI CHOWDHUR Y, WHICH ALSO SHOWS THAT ALL THE FACTS & MATERIAL WERE ALREADY AVAILABLE WITH THE AO. THUS, TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE REOPENI NG HAS BEEN DONE WITHOUT COMPLYING WITH THE MANDATORY JURISDICTIONAL CONDITION PRECEDENT AS STIPULATED IN FIRST PROVISO TO SECTION 147. 10 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD 15. WE ALSO FIND THAT AFTER RECEIPT OF INFORMATION FROM THE LD. CIT-15, KOLKATA, NO INDEPENDENT ENQUIRY WAS ALSO CARRIED OUT BY THE AO HIMSELF BEFORE REACHING HIS INDEPENDENT SATISFACTION THAT ALLEGED ESCAPEMENT HAD ACTUALLY O CCURRED OR THAT THE ASSESSEE IN FACT WAS BENEFICIARY OF ANY SUM RECEIVED FROM SHRI CHOWDHURY IN THE FORM OF SALE PROCEEDS OF SAREES. IN SUCH A SCENARIO, WHEN THE AO WAS IN RECEIPT OF T HE INFORMATION FROM THE LD. CIT-15, KOLKATA HE OUGHT TO HAVE MADE ENQUIRIES TO UNRAVEL THE TRUTH. IT HAS TO BE REMEMBERED THAT INFORMATION IS NOT SYNONYMOUS TO TRUTH. JUST BECAUS E A LETTER HAS BEEN RECEIVED FROM THE LD. CIT-15, KOLKATA THE AO CANNOT REOPEN THE COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT. THE INFORMATION GIVEN BY LD. CIT-15, KOLKATA CAN ONLY B E A BASIS TO IGNITE/TRIGGER 'REASON TO SUSPECT' FOR WHICH REOPENING CANNOT BE MADE FOR FUR THER EXAMINATION TO BE CARRIED OUT BY HIM IN ORDER TO STRENGTHEN THE SUSPICION TO AN EXTE NT WHICH CAN FORM THE BELIEF IN HIS MIND THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T. IT HAS TO BE KEPT IN MIND THAT THE ALLEGATION LEVELED BY LD. CIT-15, KOLKATA CAN ONLY RAISE SUSPICION IN THE MIND OF THE AO WHICH IS NOT THE SUFFICIENT/REQUIREMENT OF LAW FOR REOPENING OF ASSESSMENT. THE 'REASONS TO BELIEVE' IS NOT SYNONYMOUS TO 'REASON TO SUSPECT'. 'REASON TO SUSPECT' BASED ON AN INFORMATION CAN TRIGGER AN ENQUIRY TO FIND OUT WHETHER THERE IS ANY SUBSTANCE OR MATERIAL TO SUBSTANTIATE THAT THERE IS MERIT IN THE INFORMATION ADDUCED BY T HE LD. CIT-15, KOLKATA AND THEREAFTER THE AO HAS TO TAKE AN INDEPENDENT DECISION TO RE-OPEN O R NOT. AND THE AO SHOULD NOT ACT ON DICTATE OF ANY OTHER AUTHORITY LIKE IN THIS CASE LD . CIT-15, KOLKATA BECAUSE THEN IT WOULD BE BORROWED SATISFACTION. WE THEREFORE NOTE THAT THE R EASONS RECORDED BY AO TO RE-OPEN THE ASSESSMENT, DOES NOT STAND THE TEST AS LAID BY PLET HORA OF JUDICIAL PRECEDENTS WHICH WAS NECESSARY TO ASSUME JURISDICTION U/S 147 OF THE ACT . WE MAY USEFULLY REFER TO THE FOLLOWING OBSERVATIONS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS RMG POLYVINYL (I) LTD (SUPRA). 12. RECENTLY, IN ITS DECISION DATED 26TH MAY, 2017 IN ITA NO. 692/2016 PR. CIT V. MEENAKSHI OVERSEAS [2017] 82 TAXMANN.COM 300 (DELHI) , THIS COURT DISCUSSED THE LEGAL POSITION REGARDING REOPENING OF ASSESSMENTS W HERE THE RETURN FILED AT THE INITIAL STAGE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND NOT UNDER SECTION 143(3) OF THE ACT. THE REASONS FOR THE REOPENING OF THE ASSES SMENT IN THAT CASE WERE MORE OR LESS SIMILAR TO THE REASONS IN THE PRESENT CASE, VI Z., INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING REGARDING ACCOMMODATION ENTRIES PROVIDED BY A 'KNOWN' ACCOMMODATION ENTRY PROVIDER. THERE, ON FACTS, THE COURT CAME TO THE CONCLUSION THAT THE REASONS WERE, IN FACT, IN THE FORM OF CONCLUSIO NS 'ONE AFTER THE OTHER' AND THAT THE SATISFACTION ARRIVED AT BY THE AO WAS A 'BORROWED S ATISFACTION' AND AT BEST 'A REPRODUCTION OF THE CONCLUSION IN THE INVESTIGATION REPORT.' 11 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD 13. AS IN THE ABOVE CASE, EVEN IN THE PRESENT CASE, THE COURT IS UNABLE TO DISCERN THE LINK BETWEEN THE TANGIBLE MATERIAL AND THE FORMATIO N OF THE REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. IN THE PRESENT CASE TOO, THE INFORMATION RECEIVED FROM THE INVESTIGATION WING CANNOT BE SAID TO BE TA NGIBLE MATERIAL PER SE WITHOUT A FURTHER INQUIRY BEING UNDERTAKEN BY THE AO. IN THE PRESENT CASE THE AO DEPRIVED HIMSELF OF THAT OPPORTUNITY BY PROCEEDING ON THE ER RONEOUS PREMISE THAT ASSESSEE HAD NOT FILED A RETURN WHEN IN FACT IT HAD. 14. TO COMPOUND MATTERS FURTHER THE IN THE ASSESSME NT ORDER THE AO HAS, INSTEAD OF ADDING A SUM OF RS. 78 LAKH, EVEN GOING BY THE REAS ONS FOR REOPENING OF THE ASSESSMENT, ADDED A SUM OF RS. 1.13 CRORE. ON WHAT BASIS SUCH AN ADDITION WAS MADE HAS NOT BEEN EXPLAINED. 15. FOR THE AFOREMENTIONED REASONS, THE COURT IS SA TISFIED THAT NO ERROR WAS COMMITTED BY THE ITAT IN HOLDING THAT REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT WAS BAD IN LAW. 16. TAKING INTO ACCOUNT ALL THE FACTS & CIRCUMSTANC ES OF THE APPELLANTS CASE, AND APPLYING THE JUDICIAL PRINCIPLES LAID DOWN BY VARIO US COURTS, WE ARE OF THE CONSIDERED VIEW THAT THE REOPENING OF ASSESSMENT IN THE PRESENT CAS E WAS DONE WITHOUT SATISFYING THE CONDITIONS PRECEDENT IN SECTION 147 AND FOR THAT RE ASON THE REOPENING IS HELD TO BE CORUM NON JUDICE . THEREFORE, ALL PROCEEDING SUBSEQUENTLY MADE IS 'N ULL' IN THE EYES OF LAW AND SO, WE QUASH THE NOTICE OF REOPENING U/S. 148 AND SUBSE QUENT ORDERS OF THE AO AND LD. CIT(A) IS ALSO HELD TO BE NULL & VOID IN THE EYES OF LAW. ACCORDINGLY THE ASSESSEE SUCCEEDS ON THE LEGAL ISSUE CHALLENGED BEFORE US. 17. SINCE THE RE-OPENING OF ASSESSMENT ITSELF HAS B EEN HELD TO BE BAD IN LAW AND UNSUSTAINABLE, THE ASSESSEES OTHER GROUNDS OF APPE AL CHALLENGING THE LD. CIT(A)S POWER TO CAUSE ENHANCEMENT IN RESPECT OF SOURCES NOT CONSIDE RED BY THE AO AS ALSO THE MERITS OF THE CASE ARE NOT DECIDED AS THESE GROUNDS HAVE BECOME O NLY ACADEMIC IN NATURE AND THEREFORE NOT SEPARATELY ADJUDICATED. ITA NO. 1010/KOL/2018 A.Y 2007-08 (BY THE ASSESSEE) 18. IN THE SEVERAL GROUNDS, THE ASSESSEE OBJECTED TO EX-PARTE ORDER PASSED BY THE LD. CIT(A) IMPOSING PENALTY FOR CONCEALING PARTICULARS OF INCOME. SINCE WHILE DECIDING THE ASSESSEES APPEAL AGAINST THE ORDER U/S 147/143(3), WE HAVE HELD THAT THE REOPENING OF ASSESSMENT U/S 147 WAS LEGALLY UNTENABLE AND NULL I N THE EYES OF LAW. ACCORDINGLY WE HAVE QUASHED THE ASSESSMENT ORDER U/S 147/143(3), THEREF ORE ALL CONSEQUENT ACTION IS NON-EST IN THE 12 I.T.A NOS 1953/KOL/2017 & I.T.A NO.1010/KOL/2018 M/S. PREMIER VYAPAAR PVT. LTD EYES OF LAW AND SO THE LEVY OF PENALTY BY THE AO/LD . CIT(A) IS ALSO LEGALLY UNSUSTAINABLE AND ACCORDINGLY THE ORDER OF AO AND LD CIT(A) LEVYI NG PENALTY U/S 271(1)(C) IS ACCORDINGLY CANCELLED. 19. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2ND NOVEMB ER, 2018. SD/- SD/- M. BALAGANESH A.T. VARKEY ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 02-11-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: M/S. PREMIER VYAPAAR PVT. LTD, ROOM NO. 10, GATE NO.4, PODDAR COURT, 18 RABINDRA SARANI, KOLKATA-700 001. 2 RESPONDENT/DEPARTMENT: INCOME TAX OFFICER, WARD 15( 2), PODDAR COURT, 4 TH FLOOR, 18 RABINDRA SARANI, KOLKATA-700 001. 3. CIT, 4. CIT(A), KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPSTRUE COPYBY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA